The S&P 500 ends at a record high after the Fed projected a stronger economy

(Reuters) – The S&P 500 and Dow Jones industrial average closed on record on Wednesday after the Fed predicted a rapid economic recovery from the coronavirus pandemic and said it would keep its interest rate close to zero.

In its statement after its two-day political meeting, the Federal Reserve projected a rapid jump in US growth and inflation this year as the COVID-19 crisis ceases and reiterates its commitment to maintaining the target interest rate. almost zero for years to come.

Wall Street extended gains after Fed Chairman Jerome Powell told a news conference that it was too early to discuss measures to reduce support for the troubled economy.

“Today’s Fed statement was more optimistic than some expected, raising its prospects for both economic growth and the labor market. The market opinion on the statement is that it was quite optimistic “, said David Carter, investment director at Lenox Wealth Advisors in New York.

A $ 1.9 trillion spending stimulus and the launch of vaccines have fueled a rotation in so-called value stocks, which are thought to be likely to outperform as the economy recovers from the coronavirus pandemic.

At the same time, concerns that the stimulus could overheat the economy and lead to higher inflation rates have triggered a strong increase in long-term Treasury yields and made technology and other growth stocks less attractive.

Following the Fed’s statement, the 10-year Treasury yield fell to 1.6374%.

The Dow Jones industrial average rose 0.58% to 33,015.37 points, while the S&P 500 gained 0.29% to 3,974.12.

Nasdaq Composite rose 0.4% to 13,525.20.

The Nasdaq remains down about 4% from the record close on February 12th.

Amazon.com Inc. rose 1.4 percent and Tesla Inc. added 3.7 percent, with the two companies offering the largest S&P 500 boost.

Six of the 11 S&P 500 indices rose, with industry and consumer discretionary being the strongest performers and both rising by more than 1%.

Fast-food retailer McDonald’s Corp gained 1.9% after Deutsche Bank raised its target price per share and updated its recommendation to “buy” from “hold”.

Advanced issues outperformed the low number on the NYSE by a ratio of 1.33 to 1; on the Nasdaq, a 1.46-to-1 ratio favored the forwards.

The S&P 500 recorded 44 new 52-week highs and no new lows; Nasdaq Composite recorded 124 new highs and 18 new lows.

The volume of US stock markets was 11.9 billion shares, compared to the average of 14.2 billion for the full session in the last 20 trading days.